Correlation Between FrontView REIT, and Aston Bay

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, and Aston Bay at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining FrontView REIT, and Aston Bay into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FrontView REIT, and Aston Bay Holdings, you can compare the effects of market volatilities on FrontView REIT, and Aston Bay and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in FrontView REIT, with a short position of Aston Bay. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Aston Bay.

Diversification Opportunities for FrontView REIT, and Aston Bay

0.55

Correlation Coefficient

FrontView REIT,  Aston Bay

Very weak diversification

The 3 months correlation between FrontView and Aston is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Aston Bay Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Bay Holdings and FrontView REIT, is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on FrontView REIT, are associated (or correlated) with Aston Bay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Bay Holdings has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Aston Bay go up and down completely randomly.

Pair Corralation between FrontView REIT, and Aston Bay

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Aston Bay. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 2.65 times less risky than Aston Bay. The stock trades about -0.2 of its potential returns per unit of risk. The Aston Bay Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  5.50  in Aston Bay Holdings on December 28, 2024 and sell it today you would lose (0.50) from holding Aston Bay Holdings or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

FrontView REIT,  vs.  Aston Bay Holdings

FrontView REIT,

Risk-Adjusted Performance

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Aston Bay Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aston Bay Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aston Bay is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with FrontView REIT, and Aston Bay

The main advantage of trading using opposite FrontView REIT, and Aston Bay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FrontView REIT, position performs unexpectedly, Aston Bay can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aston Bay will offset losses from the drop in Aston Bay's long position.

The idea behind FrontView REIT, and Aston Bay Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.